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Growth without wellbeing brings no lasting progress, Business Day 06.10.2015

by Lorenzo Fioramonti, GovInn director

Lorenzo Fioramonti

Lorenzo Fioramonti

THE world economic outlook is pretty grim. Not only have we not come out of the 2008 crisis, but the deceleration of the Chinese “powerhouse” is now threatening to sink the global economy into a prolonged double-dip recession that may last for decades.

The Chinese debacle, just like the one in the US that started the global downturn, has been caused by the obsession with economic growth. Both bubbles overheated in the decades preceding the burst, fuelled by huge spending through the accumulation of debt. This madness was celebrated by mainstream economists, analysts, global institutions and influential media as a sign of progress: it was the golden age of growth.

It was a fake and some of us have been saying that all along. Not only did the global economy accumulate unprecedented debt, but it did so at a huge cost to society and the environment. The social debt is evident in the rise of inequality globally and within countries. Extreme inequality in the US is well documented and China is catching up. The most recent surveys of income distribution indicate that China is among the most unequal societies in the world. Moreover, the Chinese leadership fears that the social debt will soon trigger unrest.

Read the full article on Business Day: “Growth without wellbeing brings no lasting progress”

gdproblem
“Our mis-leading indicators”: book review featuring “Gross Domestic Problem”

gdproblemThe book review website Public Books features GovInn director Lorenzo Fioramonti‘s “Gross Domestic Problem” in its article on GDP “Our mis-leading indicators”.

“GDP became the yardstick for measuring progress and still often serves as a proxy for overall national well-being. Policymakers think of national economic life in terms of GDP: raising GDP is a primary policy goal and people across the world look to GDP growth rates to assess how well their leaders are guiding economic policy choices. Yet today GDP is under fire from a variety of sources. Why?”

Gross Domestic Problem is reviewed along with Diane Coyle’s “GDP: A Brief but Affectionate History” and Zachary Karabell’s “Leading Indicators: A Short History of the Numbers That Rule Our World”. In his in-depth analysis Stephen Macekura, postdoctoral fellow at the John Sloan Dickey Center for International Understanding at Dartmouth College (US), says of Fioramonti’s book:

“Fioramonti presents the most scathing critique. He criticizes the deeply held faith that raising GDP can solve all political and social problems—what he calls the “dogma of infinite GDP growth.” For him, the reliance on GDP derives from a technocratic worldview that glorifies experts, corrodes communal values, and devalues the natural world. In addition to inveighing against this worldview throughout his book, he highlights contemporary social movements that are challenging both the use of GDP and mainstream society more broadly. He explains the “transition” and “de-growth” movements, which seek to downscale production and consumption, encourage participatory decision-making, decentralize power towards the community level, redistribute resources along more equitable lines, and lower humankind’s ecological footprint. Similarly, he recounts the efforts of communities that use their own currencies and banking systems to break free of the larger financial power structures (states, multinational corporations) that dominate economic transactions worldwide. In general, he sees technocracy and its GDP “dogma” as powerful centralizing and anti-democratic forces, and he celebrates grassroots, local movements that show “alternative ways of life are not just possible but also desirable.” His prescriptions are thus cultural and political; no merely technical fixes will suffice.”

Read the full article on Public Books